In Elk River, a builder has cut nearly $350,000 from the price tag of a four-bedroom home that first listed for $849,900.

In Woodbury, a home that’s going through a short sale has been marked down 31 percent — the listing price in September of $574,900 fell to $398,500 by November.

And in Cottage Grove, a bank hoping to spur a bidding war on a foreclosed home knocked down the asking price by more than one-quarter in one day — taking it from $165,900 to $119,900.

Welcome to this winter’s residential real estate market, where desperate home sellers are taking a page from Wal-Mart’s playbook in rolling back prices to move merchandise.

To paraphrase a time-honored catchphrase of discount retailers, home prices are so low sellers must be insaaane. Or, more likely, some sellers are finally realizing that liquidation pricing often is the name of the game.

Experts say the price cuts illustrate two undeniable truths about current market conditions: Sellers are willing to negotiate on price, and buyers seemingly can sit back and wait for the craziness to continue.

“The problem in a deflating market is that people with money have no incentive to buy today,” said Jeff Crump, a professor in the housing studies program at the University of Minnesota. “They can just hold on to their money knowing that values will continue to decline.”

Crump added: “For sellers, if they sell at a heavily discounted price, they may still have a balance on their mortgage to pay in order to complete the sale.”

In 2008, the average home seller in the Twin Cities had to cut the listing price by more than 8 percent, according to statistics released by the Minneapolis Area Association of Realtors. That’s up dramatically from the boom times earlier this decade, when sellers typically cut less than 2 percent from asking prices, according to the Realtors group.

Even those statistics might understate the amount of discounting that’s going on these days, Realtors say. The figures only capture price cuts within a single listing — they don’t reference previous listings when a seller might have been asking even more, said Greg Sax, a spokesman for the Realtors group in Minneapolis.

A home on the market in Richfield, for example, has seen a series of price cuts since August that have knocked the price down by nearly 30 percent from $599,900 to $424,900.

But Jeff Gunderson, listing agent for the property with ResourceOne Realty, said the house was on the market with a previous listing for about $650,000.

Still, the discounts on current listings are large enough to conjure visions of after-Christmas sales and doorbuster bargains — with a key difference that discounts offered by home sellers usually aren’t accompanied by time limitations such as “this weekend only” or “sale lasts through Thursday.”

In the case of the Elk River home, Mary Korfiatis of Edina Realty said she didn’t set out with the idea of knocking 41 percent off the price when she first listed it in February 2008 for $849,900.

A homebuilder finished the property in 2007, and the four-bedroom home along the Mississippi River — complete with a library, butler’s pantry and great room — has never been lived in. But faced with tax bills and other carrying costs, the builder had to start cutting the price when it didn’t immediately sell, Korfiatis said.

The builder has marked down the price on seven separate occasions, usually in $50,000 increments.

“You want to do it aggressively, but not to the point where people go, ‘What’s wrong?’ ” Korfiatis said of her markdown strategy. “It’s a tough call, because maybe you take it way down but you didn’t need to go that far.”

Evidently, that’s not a concern for the bank that owns a foreclosure home in Cottage Grove and last month cut the asking price in one day by $46,000 — a discount of roughly 28 percent. Such price cuts can command attention and prompt buyers to bid the price up to market value, said Byron Anfinson, the agent listing the home with Coldwell Banker Burnet.

The Cottage Grove home had 14 showings during 55 days on the market at the higher price, Anfinson said. But in the week following the price cut, 13 additional showings brought two offers, he said.

On Thursday, Anfinson said the seller has accepted a purchase agreement on the home for more than the list price. When the home is priced right, such offers aren’t unprecedented in today’s market, he said, pointing to the example of a client who in September sold his home in Maple Grove.

“We listed our home at $229,900 and sold it in four days for $235,000 plus $6,000 for closing costs,” said Curtis Hall, the home seller. “We put an offer on a home in Richfield the next day.”

In Woodbury, the home that first listed in September at $574,900 and now is listed at $398,500 experienced a cut in November of just over $100,000. The four-bedroom house is listed by Empire Realty in St. Paul, where owner Toumoua Lee said he thinks sellers get more attention by making one or two big cuts in a price, rather than several smaller cuts over time.

That approach is seconded by the Minneapolis Area Association of Realtors, which recommends that sellers “discount with authority.”

The Minneapolis group advises to slice the asking price as much as 10 percent if showings are sparse and offers fail to emerge. Chipping away at the asking price over a longer time may not attract attention and may come across as desperation.

According to Realtor statistics, the concentration of foreclosure homes in a home-selling district apparently played a big factor in that area’s average price reduction. In the three districts that saw the largest average price reductions, about 70 percent of closed sales were “lender-mediated,” involving foreclosed properties or homes likely on the way to foreclosure.

To George Karvel, a professor of real estate at the University of St. Thomas, the price cuts illustrate how sellers are attempting to find the equilibrium price in a down market.

Too many sellers are chasing too few buyers, Karvel said. A seller who must make a deal quickly — an owner-occupant, for example, who must move for work reasons, or a bank that must reduce its inventory of foreclosed homes — is taking lumps in order to liquidate assets, Karvel said.

“The prices currently being reported are liquidation prices, due to a surplus supply of homes for sale,” he said. “The problem is that people do not want to buy a depreciating asset.”

Today’s price-cutting is especially noteworthy, Karvel said, because it comes when many sellers aren’t being very aggressive with their initial listing prices. People who’ve decided that now is a good time to buy, he added, shouldn’t be afraid to offer less.

The extent of liquidation pricing in today’s real estate market really comes into view, Realtors say, when comparing current list prices against what homes sold for a few years ago — not just the discounts within a current listing.

For example, in North Minneapolis or St. Paul’s East Side, some homes that two years ago sold for $150,000 to $200,000 are now selling for $2,000 to $20,000 because they must be torn down, said Wade Klick of Re/Max Results in Plymouth. “Each foreclosure is its own deal,” he added. “I have a listing in Ham Lake that (previously) sold for $1.1 million, and I now have it listed for $375,000.”

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